You know a company has made it when its own name is used to describe a crushing monopoly.
Uber’s CEO recently proclaimed that it wants to become the “Amazon of transportation.”
Whether it’s “the Amazon of China,” “the Amazon of logistics,” or even “the Amazon of cannabis,” the phrase is everywhere.
Now that Amazon, Inc. (NASDAQ:AMZN) has become the second company to hit $1 trillion in market cap, we’re going to be hearing that phrase even more often. After all, this company has over 95 million users in the U.S. alone. One out of every two households uses this service.
If you haven’t yet bought AMZN but are considering it, I have good news for you: There’s still time. Based on my research, I see plenty of upside potential for the e-commerce giant. In fact, I currently recommend the stock as a Strong Buy in my newsletters.
Amazon dominates the online sale of consumer products across North America and much of the world. If you’ve ever shopped on Amazon.com, you know that you can purchase pretty much anything through the website. And, in most cases, you can get free shipping. So it’s no surprise that Amazon Prime members spend an average of $1,500 on the platform each year.
Turn $10,000 into $133,900
Along with online retail, Amazon also manufactures and sells electronic devices, like Kindle e-readers and tablets, smartphones and virtual assistants. The company also offers cloud storage services, which allow its users to store unlimited photos, videos, files and documents remotely. Amazon Web Services’ (AWS) biggest customer is the U.S. government, with over 2,000 agencies using AWS.
And that’s not even mentioning Amazon’s recent acquisition of Whole Foods Market, or its popular entertainment segment. In fact, Amazon is claiming its share of the booming online entertainment industry with its Prime Video service. Amazon is competing against Netflix’s (NASDAQ:NFLX) streaming service, which is gutsy.
I understand that AMZN comes with a hefty price tag, so if you’d rather not add the stock at this time, that’s fine. However, when it comes to monopolistic, market-dominating companies like Amazon, I am comfortable with paying a premium. Judging from analysts’ forecasts, Amazon shows no signs of slowing down.
For the third quarter, the analyst community is expecting that Amazon.com will post 30.4% annual sales growth and a whopping 498.1% annual earnings growth. And those estimates keep climbing — over the past three months, the consensus EPS estimate has jumped 78%.
Right now, retail stocks are outperforming due to strong consumer spending in the U.S. Amazon, as the most innovative and dominant retailer, is at the top of the heap. Amazon has established a devoted customer base through its e-commerce sites, and this brand loyalty is carrying over to its new ventures. This makes Amazon’s growth prospects especially exciting.
For these reasons, I recommend AMZN as a Strong Buy. AMZN is a tremendous monopolistic play that continues to benefit from strong consumer spending in the U.S.
Sincerely,
Louis Navellier
